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2014 (5) TMI 542 - AT - Income TaxDeletion of disallowance on account of variation in closing stock – Held that:- Revenue has not been able to refute the findings of fact recorded by the CIT (A) - as per the audited balance sheet of the assessee, the value of closing stock is Rs. 2,27,92,346 - The quantity of closing stock tallies with the figure of excise records in RG-23, Part II and RG- 1 - CIT (A) is correct in holding that the AO wrongly took the value of stock of the assessee, as shown in the original return of income - CIT (A) rightly directed the AO to adopt the figure of the assessee’s closing stock at Rs. 2,27,92,346/-, as declared in the revised return filed on 14.12.09, as against the value of closing stock of Rs. 2,65,61,073/-, as taken by the assessee in its original return of income – the order of the CIT(A) is upheld – Decided against Revenue. Deletion of disallowance of fuel expenses – Held that:- CIT (A) has rightly considered the contention of the assessee that the figure of Rs. 26,27,504/- was not the figure of fuel consumption and the correct fuel consumption was of Rs. 6,32,63,773/-, as compared to that of Rs. 5,46,31,886/- for the immediately preceding assessment year - The sales of the assessee company during the year were of Rs. 56,09,71,932/-, as compared to those of Rs. 39,34,31,972/- for the preceding year - Percentagewise, it worked out to 11.28% for the year, as compared to 30.89% for the preceding year - The AO had made the addition out of the closing stock incorrectly- All the fuel expenses had been made on regular bills from the suppliers and the payment had been made through account payee cheques - A copy of the assessee’s fuel account was filed – the order of the CIT(A) is upheld – Decided against Revenue. Deletion of disallowance of stores and spares expenses – Held that:- CIT(A) was of the view that all the purchase transactions were through cheque payment, but for some small purchases done on urgent basis at the plant itself, in cash, through regular cash memos, entry qua which was duly made in the assessee’s books of account - the assessee had not claimed this stock as expense u/s 37(1) of the IT Act - an asset was created in the inventory to be claimed in the next year- The expenditure found by the CIT (A) to be the figure of closing stock as per the assessee’s books of account - The financial statement produced showed that the assessee had incurred an expenditure during the year on stores and spares as against a similar expenditure in the immediately preceding year - There was also no finding to the effect that the expenses had been incurred for any non-business purpose – the details include description of the stores and spares, the party from whom they were purchased, the bill No., the billing date, the quantity, the rate and the amount - None of the above evidence produced by the assessee in support of its claim, as considered in detail by the CIT (A) – the order of the CIT(A) is upheld – Decided against Revenue.
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